The Mongolian Government has canceled the auction of an estimated USD2-billion stake in the Tavantolgoi deposit, one of the world’s largest undeveloped coal deposits, ending hopes of global mining giants eager for a slice of the project, sources said.

JP Morgan and Deutsche Bank were no longer advising on the sale of the 49 percent stake, three sources familiar with the matter have said. The two banks were retained more than a year ago to run the auction.

Shortlisted bidders for the stake in the Tavantolgoi mine included heavyweights BHP Billiton, India’s Jindal, Brazil’s Vale, US coal miner Peabody, and China’s Shenhua. A South Korean COPEC consortium, a group of Japanese companies, and a Russian consortium including Gazprom and Renova were also named as bidders.

The Government has decided to hold 100 percent of the huge deposit, in a determination to fully control one of its most prized natural resources. Late last year, Mongolia struck a deal to develop a massive copper and gold project with Ivanhoe Mines and Rio Tinto.

Now, the sources said, the Government hoped to strike a deal with a global miner to develop Tavan Tolgoi on a contract basis, without a significant equity holding in the project.